As with any vehicle driving on the roads you will need to get your car insured. You can view this as a burdon but should your vehicle get damaged or stolen then you will not lose out on this source of income as your insurance policy will kick-in. It’s not cheap though, when is it ever, and so make sure you shop around for the best deals.
It’s a necessary evil but you can’t drive without it.
What about my existing car insurance?
You will need to get a policy specifically for Private Hire Vehicles which will cover you for the work you are doing so your standard insurance policy won’t cut it. You will still be able to use your car during your own private time though so you won’t need to have two policies running concurrently, just the Private Hire one.
How much does minicab insurance cost?
Insurance is a lot more than your standard car insurance and a rough estimate would be around £2,000-£2,500 for fully comprehensive insurance on a standard saloon car.
There are many variables though from age, previous claims, no claims bonus, location, etc and there is no harm in ringing around and getting no obligation quotes. Sadly, if you are under 25 then you will also find that premiums can be very high, with some companies not even offering insurance to those in the 21-25 age bracket.
Cost busting tips
Buying private hire insurance is no different to buying regular insurance so think of all the ways you can lower the costs.
Changing the voluntary excess can save you money on your policy but if you do have to make a claim then any savings you’ve made will automatically be lost. It is worth seeing what the difference is though and sometimes you may only be saving a few quid so it’s worth having the voluntary excess as low as possible.
Don’t forget that you will usually have a compulsory excess on the policy as standard which will normally start at around £250.
Levels of cover
As expected the more cover you get, the higher the initial costs will be so think carefully deciding on comprehensive, third party fire and theft and third party only will often depend on factors such as the age and value of your car.
Opting for third party could lower your costs to £1,000 per year but will only protect your customers and any vehicle repairs will be down to you.
No claims discount
No claims discounts are only transferrable from other private hire vehicle insurance policies and not your standard car policies but if you do have a long career in the minicab trade then you could get a good discount on future polices.
Be a good driver
Having no points or traffic violations on your licence will have an effect of your premiums so drive safe, don’t break the law, and you will be rewarded with lower costs.
Reduce the length of your policy
Some insurance companies will offer shorter 3 month or 6 months policies as opposed to the general 12 month ones per month these may work out slightly more expensive but at least you’re not ties into a year’s insurance if you sell your vehicle. Please note that if you choose these policies then you might not be able to add them to you no claims bonus.
There currently aren’t any private hire comparison sites so you will have to do the hard work and shop around but there’s nothing to stop you getting no-obligation quotes and an hour on the phone or online could save you hundreds so don’t just stick with the first quote you get.
Check to see if your policy includes replacement vehicles as if you’re not driving you’re not earning, so look out for breakdown cover and replacement PCO licensed vehicles so you can carry on working.
Hire a vehicle to save costs
If after reading this you think you won’t be able to afford to run a minicab then consider hiring one as insurance etc will normally be included in the rental which will be around £35 per shift for the vehicle. This could work out a cheaper alternative depending on your hours at work as you won’t be paying for the car to sit on your drive.